RAGN-SELLS AS is a waste management undertaking whose principal activity is the collection and transport of municipal waste. RAGN-SELLS AS also had a holding in the undertaking OÜ AMESTOP engaged in the management of the landfill in Torma, Jõgeva County. AS Väätsa Prügila operates the landfill located near Väätsa, Järva County (Väätsa landfill).
In December 2021, RAGN-SELLS AS submitted a notice of concentration to the Competition Authority to acquire control over AS Väätsa Prügila. It was the second time that the Competition Authority processed the concentration of RAGN-SELLS AS and AS Väätsa Prügila. The Competition Authority prohibited the concentration of OÜ R-S Valdus, a subsidiary of RAGN-SELLS AS, and a part of AS Väätsa Prügila, by its Decision No 5-5/2018- 058 of 21 September 2018. During the concentration proceedings, it became evident that the concentration would primarily impact two vertically related waste management services: (i) the collection and transport of municipal waste, and (ii) the final handling of mixed municipal waste in landfills. The Competition Authority determined that since both goods markets were highly concentrated, the concentration would have distorted competition in both goods markets. The concentration of vertically related municipal waste handling services under a single undertaking would have granted it significant advantages over a limited number of competitors and thereby distorted competition.
OÜ R-S Valdus filed a complaint with Tallinn Administrative Court for annulment of the decision of the Competition Authority and determination of permissibility of concentration. In November 2020, Tallinn Administrative Court rendered a judgment in the case, refusing to grant the complaint of OÜ R-S Valdus, after which OÜ R-S Valdus submitted an appeal to Tallinn Circuit Court. In October 2021, OÜ R-S Valdus made a declaration for discontinuation of the complaint, Tallinn Circuit Court terminated the proceedings and annulled the judgement of Tallinn Administrative Court. The complaint was discontinued due to the fact that RAGNSELLS AS successfully participated in the public auction organised by Paide City Government and Türi Rural Municipality Government for the sale of the shares of AS Väätsa Prügila. In December 2021, RAGN-SELLS AS submitted a notice of concentration to the Competition Authority to acquire control over AS Väätsa Prügila.
During the second processing of the concentration, the Competition Authority had to analyse first and foremost whether and which circumstances had changed compared to the previous concentration procedure. It became apparent that the waste management sector had undergone some changes in the meantime, which affected both the competitive situation as well as the business activities of undertakings operating in this sector. The following constitute the most relevant circumstances. Firstly, the acquired undertaking AS Väätsa Prügila no longer deposits waste as of 2022 due to insufficient sorting capacity and is now delivering accepted waste to the Iru Power Plant of Enefit Green. Secondly, Iru Power Plant no longer imports waste as of 2022, leading to increased competition among landfills for accepted waste. It is important to point out that during the previous concentration procedure, the Competition Authority had already determined that the incineration of mixed municipal waste at Iru Power Plant cannot be considered a substitute for the acceptance (and recovery or depositing) of mixed municipal waste at landfills. As the incineration of mixed municipal waste takes priority under the waste hierarchy principle, mixed municipal waste is transported to the Iru Power Plant as a priority for the production of heat and electricity. Any mixed municipal waste left over from the process is primarily disposed of in landfills. Thirdly, compared to the time of previous proceedings, where the Torma landfill operated by OÜ AMESTOP, controlled by RAGN-SELLS AS, was in the process of closing down, a new depositing area was completed at Torma landfill in 2020 and the business operations of the landfill were resumed. Therefore, RAGN-SELLS AS was already accepting waste at the Torma landfill before the concentration took place.
In particular, the concentration primarily affected the collection and transport of municipal waste, and waste acceptance, recovery and depositing at landfills. The principle of proximity still applies to the landfilling of mixed municipal waste, according to which mixed municipal waste must be transported to the nearest landfill. In the light of the above, not all landfills compete with each other for the acceptance of mixed municipal waste from different regions of Estonia. The Competition Authority determined that, in Central and South Estonia, Väätsa landfill primarily competes with Paikre landfill and Torma landfill. The main competitor of RAGN-SELLS AS in the collection and transport of municipal waste in this region is Eesti Keskkonnateenused AS. The Competition Authority maintained that, similarly to previous concentration proceedings, the concentration could distort competition in both goods markets.
In order to prevent anti-competitive effects resulting from the concentration, RAGN-SELLS AS proposed the assumption of obligations. The obligations consisted of the transfer of the holding of RAGN-SELLS AS in OÜ AMESTOP, the operator of Torma landfill (thereby eliminating the horizontal overlap between the business activities of RAGN-SELLS AS and AS Väätsa Prügila in the acceptance and depositing of mixed waste), and activities related to the integrated environmental permit of AS Väätsa Prügila.
The Competition Authority assessed the proposed obligations and determined that they effectively address the competition concerns resulting from both the horizontal overlaps and vertical relations between the business activities of the parties in the acceptance and depositing of mixed municipal waste at landfills. Therefore, the Competition Authority granted RAGN- SELLS AS and AS Väätsa Prügila the permission to concentrate, subject to the parties fulfilling their obligations.